Children’s Hospital expansion goes beyond Prouty Garden

THIS IS NOT about a garden. Not anymore.

Giving Boston Children’s Hospital the go-ahead for a $1 billion expansion plan will alter the health care landscape beyond a patch of beloved green space. Expansion would allow Children’s to further dominate the pediatric care market, hurt competitors, and drive up health care costs.

That’s what the Massachusetts Health Policy Commission — an independent watchdog agency — predicted in a recent report. Despite the warning, Children’s is on track for getting what it wants from the state. Now it all comes down to Governor Charlie Baker and the extent of his administration’s commitment to affordable health care for all.

For months, the campaign to stop Children’s revolved around a well-publicized effort to preserve Prouty Garden, a peaceful retreat for patients, families, and hospital employees that will be demolished when the hospital moves forward with new construction. Prouty’s backers are pledging to continue to fight in court, but the consequences of Children’s expansion plan go beyond the garden’s future.

As the Health Policy Commission also warns, the 71 new beds that Children’s plans to add “could also destabilize competing local pediatric programs.” In Boston, the Floating Hospital for Children and Massachusetts General Hospital pediatric unit are considered most at risk, but the impact will be far-reaching if Children’s needs “local” patients to fill the new beds.

Why should the public care? “A monopoly is never good,” said Dr. Rashed Durgham, chairman of pediatrics and chief administrative officer for Floating Hospital for Children. “Having other thriving institutions that can provide high quality care is important for the people of Massachusetts.”

More choice means more opportunity for second opinions; less choice means higher prices for consumers. Children’s is a great hospital, committed to saving lives. But its prices are already 51 percent higher than MGH for the same pediatric services and 69 percent higher than the Floating Hospital. Without significant competition, Children’s can charge even higher prices to health plans and patients. Children’s CEO Sandra Fenwick, who aggressively fought off Prouty Garden backers, dismissively waved off the HPC’s cost warnings as well. “We disagree with the assumptions, to the extent they are comprehensible,” she wrote recently to the watchdog agency.

Children’s contends it will fill its new beds through national and international referrals. Yet competitors say it’s also working hard to expand its referral network in Massachusetts. It can’t have it both ways. If it’s taking patients from the local market, that will influence other pediatric services. If it’s not, why should Massachusetts insurance payers and taxpayers foot the bill for its expansion?

Last week, the staff at the Department of Public Health gave Children’s the go-ahead for its expansion plan. To address cost concerns, the staff approval puts some “conditions” in place, such as a stipulation that Children’s must not pass the costs of its projects on to patients and insurers “in excess of the Commonwealth’s cost containment goals.” DPH also said Children’s must show that it’s meeting its projections for out-of-state patients and must maintain care for children on Medicaid. If the hospital fails to comply, it could be fined up to $27 million.

That sounds tough. But in reality, the conditions rely on Children’s policing itself. And if it puts everyone else out of business, it will have more than enough money to pay the fines.

All Children’s needs now is formal approval from the Public Health Council, which is chaired by the commissioner of public health — a Baker appointee. The Health Council vote, scheduled for Oct. 20, will say a lot about the governor’s health care vision and legacy.

Baker is an expert on health care policy and its connection to cost. During his first tenure in government, under Governor William F. Weld, he pushed a market-oriented philosophy and signed off on the merger of Massachusetts General and Brigham and Women’s hospitals, which led to the creation of Partners HealthCare. In 1999, Baker was named president of Harvard Pilgrim Health Care, the state’s second largest health insurer. Testifying a few years later, before the Federal Trade Commission, he said the merger that created Partners was partly responsible for a spike in health care costs. Again addressing hospital consolidation and its impact on cost, hetold the Globe Spotlight Team in 2008, “If we keep replacing low-cost community capacity with higher-cost downtown Boston capacity, it’s going to be hard to make the math work in a way that’s affordable.”

The same math applies today.